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Businesspeople continue to wary about state of national economy post 4/21- survey

August, 2, 2019

According to the latest monthly LMD-Nielsen Business Confidence index (BCI) survey, only 12% of respondents consulted by Nielsen, for LMD’s publisher Media Services, anticipate that the economy will improve in the next 12 months.

Conversely, the majority view is that economic conditions will worsen.

“Certain industries have been slow to pick up after April and this will have a negative impact on the economy going forward. The government needs to ensure that these industries are supported in the coming months in order to get back on track,” States a businessperson.

Meanwhile, about one in four corporate executives feel that the business will improve in the next 12 months.

However, the short – term sentiment in this regard to business performances is more muted with only 19% of respondents to the monthly survey expecting sales volumes to improve in the next three months.

“Due to the event in April, we experienced a negative impact on our investments; and therefore, we have had to defer our plans for this quarter. We are hopeful however, that we will witness positive results in the coming months,” says another member of the biz community.

Meanwhile, a poll respondent notes that “the tourism industry has not recovered since April and although it seems to be picking up. It will take some time before it comes up to its previous level.  Due to the drop in tourist arrivals, it is not only hotels that are affected but many other small businesses as well.”

Moreover, around 80% of businesspeople surveyed by Nielsen continue to feel that this is not a good time to invest in Sri Lanka.

Nevertheless, a corporate executive remark: “The investment climate is in a fair state - because the government has taken the initiatives to raise funds with regard to investment after the April attacks. However, more should be done to regain the trust of investors.”

“Before April, the investment climate was fairly good – even though the political climate was not in order, after April however, the investment climate has taken a massive hit  and there is a high level of uncertainty among investors,” observes another.

Given the unfavorable perceptions with respect to investment conditions, businesspeople also seem to be holding back on their workforce expansion plans.

In line with this, only 8% of those consulted by the pollsters say they have plans to increase employee numbers in the coming six months.